Voisey�s Bay talks off

Premier Brian Tobin said today that after meetings this past weekend, the province has decided to suspend negotiations with Inco on the development of Voisey�s Bay Project.

"We have come to the mutual conclusion that - for now - discussions on the development of Voisey�s Bay during the 2000 construction season will be suspended," said Premier Tobin. "At this time the elements we require to make this deal viable for the province are just not there. We require a commitment to full processing in the province, from ore to finished nickel metal whether or not the hydrometallurgical process is determined to be a success. At this point, Inco cannot make that commitment, and we will not agree to less."

The premier noted that the proposed hydromet process is new and has not been commercialized on sulfide ore such as will be mined at Voisey�s Bay. He encouraged Inco to increase their own comfort level with this leading-edge technology through further research and development.

"Hydromet processing for this type of ore is new, and no one knows for sure if it will be successful," said the premier. "While we would gladly participate in Inco�s pilot project, we could not enter into an open-ended deal that did not provide a commitment to traditional processing should the hydromet process fail. With further testing and development, this leading-edge technology may prove to be highly successful, and we look forward to the results of Inco�s research."

"It is a positive sign that Inco intends to continue its exploration plan this summer, and continue developing the hydromet technology," said the premier. "It is proof the Inco recognizes the potential of the Voisey�s Bay deposit."

Voisey�s Bay remains one of the richest, low-cost nickel deposits in the world. It is a good project and the province feels that the right deal can be reached; if not now, then in the future.

"We believe that the project can be developed economically to the benefit of both the shareholders of Inco and the residents of this province," noted the premier.

"I have always maintained that this government would not do a deal on Voisey�s Bay if it was not the right deal for the people of Newfoundland and Labrador," said Premier Tobin. "We must seek full and fair benefits from our natural resources and ensure that we maximize those benefits. While we look forward to a deal, our province is growing economically without Voisey�s Bay. In fact, none of the major forecasters have included Voisey�s Bay in growth projections for the province."

Media contact: Heidi Bonnell, Communications, (709) 729-3564.

2000 01 11                             7:25 p.m.